Magliacane Corporation is a service company that measures its output by the numb

Question

Magliacane Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes.

When the company prepared its planning budget at the beginning of February, it assumed that 39 customers would have been served. However, 35 customers were actually served during February.

The revenue in the company's flexible budget for February would have been closest to:

$153,200

$170,709

$167,700

$150,500

Fixed Element per Month Variable Element per Customer Served Revenue $ 4,300 Employee salaries and wages $ 58,100 $ 1,200 Travel expenses $ 700 Other expenses $ 31,900

Explanation / Answer

The correct answer is $ 150,500

Note : Revenue = 35 Customers * $4,300

= $ 150,500

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